Demand-side economics

Definition

Demand-side economics refers to a macroeconomic approach that focuses on stimulating aggregate demand in order to achieve economic growth and reduce unemployment. It emphasizes the role of government intervention through fiscal policy measures such as tax cuts or increased government spending.

Related terms

Fiscal Policy: This term refers to the use of government spending and taxation policies to influence the economy.

Aggregate Demand: Aggregate demand is the total quantity of goods and services demanded by all sectors of an economy at different price levels.

Multiplier Effect: The multiplier effect refers to the magnification of initial changes in spending or investment that leads to larger changes in overall output and income in an economy.